Dr. Davide Astiaso Garcia - Secretary General – Italian Wind Energy Association
Wind power costs and benefits: The Italian scenario
An economic approach
Dr. Davide Astiaso Garcia
Secretary General
ANEV - Italian Wind Energy Association
A study realized by
Dr. Davide Astiaso Garcia - Secretary General – Italian Wind Energy Association
Wind power and 2020 objectives in Italy
780 874 1.131 1.639 1.908
2.714 3.538
4.898 5.814
6.936 8.119 8.550 8.623 8.623
12.000
1.143
680
0
2.000
4.000
6.000
8.000
10.000
12.000
14.000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (nov)
- 2020 (PAN)
MW
Aventi diritto (aste
+ reg) non ancora
in esercizo 2.234 MW
Off-shore
Plants selected in Auctions/Registers but
not commissioned yet
Dr. Davide Astiaso Garcia - Secretary General – Italian Wind Energy Association
Auctions (Plants > 5 MW)
Total assigned power (2012, 2013, 2014)
Total assigned
power
1180 MW
Built
193 MW
In construction
149 MW ???
838 MW
Dr. Davide Astiaso Garcia - Secretary General – Italian Wind Energy Association
Auctions: Built and incentivated powers
59 59
www.elemens.it
Chart 26: State of arts of plants winning the first 2 wind auctions, depending on the typology of operator [eLeMeNS]
All things considered, we believe that – if new auction procedures will be approved by the Ministry - such a clear signal should be
taken into account. The circumstance that most of the winning plants were not so far commissioned and that commissioning rate
were close to zero for smaller / less structured operators (which, in addition, were more aggressive in terms of reduction bid)
suggests that both the selection process before the procedure could be improved and that the commitment for operators
should be enhanced: referring to other countries experiences, this could happen also through the introduction of a pre-qualification
phase or providing a solid guarantee (as a deposit).
410,5
81
302,3
142
59,2
96
14
355,5
282,4 73,1
0
200
400
600
800
1000
Assigned Built - in construction On hold For sale
MW
Medium - big RES producers
Small RES
producers
Developers
908 MW
250 MW 342 MW
316 MW
State of the art of the first and the second auction winners
Dr. Davide Astiaso Garcia - Secretary General – Italian Wind Energy Association
12 15 38
125
221
319 324
492
706 760
986
1.160
1.395 1.419 1.403
1.295
1.171
1.044
1.040 1.026
1.012
825
608
525
347
224
70 68 67 66 63 61 50 29
-
200
400
600
800
1.000
1.200
1.400
1.600
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
Mili
oni d
i euro
CV TO Aste Registri Sotto soglia Direct access Registers Auction
Mill
ions
euro
s
Wind power incentives costs – low scenario Low scenario: only a part of the auction winners will get the incentives
High Scenario: all the auction winners will get the incentives
The main driver for cost reduction is the end of incentives for Green Certificates (CV) plants1
Dr. Davide Astiaso Garcia - Secretary General – Italian Wind Energy Association
Wind power benefits
‣ Reduction of the energy National Single Price (NSP)
[beneficiaries: electric energy consumers]
‣ Tax Revenue
[beneficiaries: public finance / taxpayers]
‣ Local royalties
[Beneficiaries: Municipalities with wind farms]
‣ This study does not take into account other benefits such as:
‣ Direct and indirect Occupazione
‣ Health and environmental benefits (Reduction of toxic and
greenhouse gases emissions)
Dr. Davide Astiaso Garcia - Secretary General – Italian Wind Energy Association
-
50
100
150
200
250
300
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Mili
oni d
i Euro
ICI / IMU
ROBIN TAX
IRES + IRAP
Wind power benefits – tax revenue
-
50
100
150
200
250
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Mili
oni d
i Euro
IMU + TASI
IRES + IRAP
Dr. Davide Astiaso Garcia - Secretary General – Italian Wind Energy Association
Wind power benefits – Local Royalties
0
10
20
30
40
50
60
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Mili
oni d
i Euro
0
20
40
60
80
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Mili
oni d
i Euro
Low
High
Dr. Davide Astiaso Garcia - Secretary General – Italian Wind Energy Association
Wind power benefits
National Single Price (NSP) 2013
2.8 3.4 2.3 3.0 2.5 1.9 3.2 2.9 4.4 2.9 1.0 2.2 2.2 2.1 0.5 2.4 2.5 4.9
1.9 2.3 3.4 2.5 2.0 2.4
0
20
40
60
80
100
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
€/M
Wh
Spread
Simulated NSP 2013 w/o Wind
Real NSP 2013
62.99
65.21
+2.22 +4.41
7.20
Real NSP 2013 Simulated NSP 2013 without Wind
Simulated PUN 2013 without PV
Simulated PUN 2013 without intermittent RES
€/M
Wh
Average NSP increase assessment
without wind energy in 2013
TOTAL ANNUAL SAVING: 743
MILLIONS €
Hourly average NSP in 2013
Dr. Davide Astiaso Garcia - Secretary General – Italian Wind Energy Association
Wind power effect on NSP
2014 – 2035 Scenario
-
0,5
1,0
1,5
2,0
2,5
3,0
3,5
0
200
400
600
800
1000
1200
1400
1600
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Red
uct
ion o
f av
erag
e N
SP [€/
MW
h]
Mill
ions
Euro
Benefit for consumers - Low Benefit for consumers - High Reduction on average NSP - Low Reduction on average NSP - High
Reduction of Wind energy
penetration due to
decommisioning of part of
total Wind capacity
The benefit connected to
Wind energy increases
together with the increase of
NSP
For the period 2014-2035 the total benefit estimated is
between:
13 billions € (low scenario)
15 billions € (High scenario)
Dr. Davide Astiaso Garcia - Secretary General – Italian Wind Energy Association
Total support scheme
cost 5,16 Billions €
0,82 Billions €
0,34 Billions €
0,74 Billions € NSP reduction
[year 2013]
Tax revenue
Local Royalties
3,26 Billions € Net cost
2002 - 2013
Wind power Costs Vs Benefits
Historical data (2002-2013)
Dr. Davide Astiaso Garcia - Secretary General – Italian Wind Energy Association
1393,1 1414,3 1396,6
1288,5
1164,3
1037,8 1033,5 1019,7 1006,4
819,3
603,2
520,3
342,2
219,1 65,1 63,9 62,7 61,3 59,5 57,1
46,6
27,0
214,1 196,0 196,1 187,7 186,2 173,7 175,9 178,5 180,0 162,8 133,2 113,7 89,0 61,8 52,2 54,5 51,9 51,4 46,7 41,7 33,7
28,0
70,0 71,2 71,5 70,1 67,3 65,8 61,7 61,9 62,4 63,0 59,3 52,8 48,4 42,7 36,9 34,1 32,4 31,7 28,8 25,8 20,0 15,9
505,7 526,7 540,4 545,3 552,1 559,1 579,2 596,6 627,5
663,6 695,0 714,0 726,2 731,5 737,9 731,4
703,8 696,5 643,8
589,4
481,9
412,8
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Mill
ions
Euro
Support scheme costs Tax Revenue Local Royalties NSP reduction
-603,3 -620,5 -588,6 -485,5 -358,7 -239,2 -216,7 -182,7 -136,5 70,1 284,4 360,1 521,4 616,9 761,9 756,1 725,3 718,3 659,8 599,8 488,9 429,6
Costs/
Benefiits
Annual net [Milion Euro]
Wind power Costs Vs Benefits
Prospectives 2014-2035 (Low Scenario)
Dr. Davide Astiaso Garcia - Secretary General – Italian Wind Energy Association
1393,3 1433,9
1460,5
1354,6
1231,2
1104,4 1098,1 1082,8 1066,4
875,6
656,4
572,0
393,1
268,9
113,9 111,6 109,2 106,5 102,9 98,3 76,4 48,6 214,1 205,1 204,6 193,8 192,3 179,6 181,7 184,1 185,4 167,7
137,7 118,1 93,6 67,4 58,4 58,7 61,1 62,3 57,4 52,0 43,5 37,1 70,0 73,6 75,2 73,8 71,0 69,6 65,4 65,6 66,1 66,7 63,0 56,5 52,1 46,4
40,6 37,8 36,1 35,4 32,5 29,6 23,7 18,9
505,7 551,3
582,7 591,8 603,1 614,7 641,0
664,6 703,6
748,9 789,5
816,3 835,7 848,1 861,8 861,7 838,5 838,0
787,4 735,0
622,6
554,2
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Mili
oni d
i Euro
Costo Incentivazione Gettito Fiscale Misure Compensative Riduzione del PUN
1393,1 1414,3 1396,6
1288,5
1164,3
1037,8 1033,5 1019,7 1006,4
819,3
603,2
520,3
342,2
219,1 65,1 63,9 62,7 61,3 59,5 57,1
46,6
27,0
214,1 196,0 196,1 187,7 186,2 173,7 175,9 178,5 180,0 162,8 133,2 113,7 89,0 61,8 52,2 54,5 51,9 51,4 46,7 41,7 33,7
28,0
70,0 71,2 71,5 70,1 67,3 65,8 61,7 61,9 62,4 63,0 59,3 52,8 48,4 42,7 36,9 34,1 32,4 31,7 28,8 25,8 20,0 15,9
505,7 526,7 540,4 545,3 552,1 559,1 579,2 596,6 627,5
663,6 695,0 714,0 726,2 731,5 737,9 731,4
703,8 696,5 643,8
589,4
481,9
412,8
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Mill
ions
Euro
Support scheme costs Tax Revenue Local Royalties NSP reduction
Costs/
Benefiits
Annual net [Milion Euro]
Wind power Costs Vs Benefits
Prospectives 2014-2035 (High Scenario)
-603,4 -603,8 -598,0 -495,2 -364,8 -240,5 -210,1 -168,4 -111,3 107,6 333,8 418,9 588,4 693,0 846,8 846,6 826,6 829,3 774,4 718,3 613,5 561,6
Dr. Davide Astiaso Garcia - Secretary General – Italian Wind Energy Association
Total support
scheme cost 13,80 – 14,95 Billions
€
2,61 – 2,76 Billions €
1,09 – 1,17 Billions €
13,05 – 15,09 Billions
€ NSP reduction
Tax revenue
Local Royalties
2,95 – 4,06 Billions € Net Benefits
2014-2035
Wind power Costs Vs Benefits
2014 – 2035 prospectives
Dr. Davide Astiaso Garcia - Secretary General – Italian Wind Energy Association
Could be possible to have new auctions?
500 500 500 500 500 442 466
356
0
100
200
300
400
500
600
2012 2013 2014 2015 2016 2017 2018 2019
MW
Ince
ntiva
ti
DM 6 luglio 2012
Nuove aste
Decree
6/7/2012
New
auctions
MW
wit
h in
ce
nti
ve
s
Five new auctions simulation with the following assumptions:
• One auction a year from summer 2015
• 500 MW for each auction
• The base price is 115 €/MWh for the first 3 auctions and 110 €/MWh for the last
two (instead of 127 €/MWh)
Dr. Davide Astiaso Garcia - Secretary General – Italian Wind Energy Association
780 874 1.131 1.639 1.908
2.714 3.538
4.898 5.814
6.936 8.119
8.650 8.623 8.623 9.766
12.000
1.143
2.500
680
0
2.000
4.000
6.000
8.000
10.000
12.000
14.000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (nov)
DM 6 luglio
Futuro DM
2020 (PAN)
MW
Contingenti
2012 - 2014
Contingenti
2015 - 2019
Supported MW
2012-2014
Supported MW
2015-2019
Decree 6/7/12
Future Decree
2020 NREAP
Wind power to be installed with new
auctions (high scenario)
Low scenario (50% of the auction winners will be installed):
10.200 MW in 2020 - 1800 MW (or 2.480 MW including offshore) to the 2020 target
Dr. Davide Astiaso Garcia - Secretary General – Italian Wind Energy Association
1.395 1.419 1.403
1.302
1.193
1.087 1.105 1.105 1.095
903
681
595
415
290
133 130 126 122 116 108 92 63
-
200
400
600
800
1.000
1.200
1.400
1.600
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
Mili
on
i di e
uro
Vecchi incentivi Nuove aste New schemes Old schemes
Mill
ions
euro
s
Wind energy cost with new auctions (low
scenario)
Dr. Davide Astiaso Garcia - Secretary General – Italian Wind Energy Association
1.395 1.440
1.473
1.380
1.286
1.198 1.231 1.241 1.228
1.027
797
705
523
394
234 227 219 211 199 184
149 104
-
200
400
600
800
1.000
1.200
1.400
1.600
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
Mili
oni d
i euro
Vecchi incentivi Nuove aste New schemes Old schemes
Mill
ions
euro
s
Wind energy cost with new auctions
(high scenario)
The total costs of new auctions from 2017 to 2015 will be 1,89 billions €
Dr. Davide Astiaso Garcia - Secretary General – Italian Wind Energy Association
108
232
359 363 377 391
578
7 22 43
65 80 83 78
-
100
200
300
400
500
600
700
2017 2018 2019 2020 2021 2022 2023
Mili
oni d
i euro
Risparmio uscenti CV (su 2016) Maggior costo nuove aste (su 2016)
Mill
ions
euro
s
Savings for CV phasing out Costs for new auctions
Major costs Vs Minor costs (low scenario)
‣ Major costs for new auctions will be in 2022 (83 Millions €)
‣ That cost will represent between 6% and 21% of the savings for GCs
phasing out
Dr. Davide Astiaso Garcia - Secretary General – Italian Wind Energy Association
Major costs Vs Minor costs (high scenario)
106
229
356 363 379
396
587
13 43
81 121
147 151 141
-
100
200
300
400
500
600
700
2017 2018 2019 2020 2021 2022 2023
Mili
oni d
i euro
Risparmio uscenti CV (su 2016) Maggior costo nuove aste (su 2016)
Mill
ions
euro
s
Savings for CV phasing out Costs for new auctions
‣ Major costs for new auctions will be in 2022 (151Millions €)
‣ That cost will represent between 12% and 38% of the savings for
GCs phasing out
Dr. Davide Astiaso Garcia - Secretary General – Italian Wind Energy Association
6,7
22,4
43,1
65,3 79,8
82,8 78,5
73,3 69,9 68,1 65,8 63,7 61,4 58,8 56,0 52,2
47,4 41,5
34,5
2,3 4,6 7,3 9,0 10,3 9,5 9,8 9,6 9,5 9,5 9,5 9,5 9,4 9,3 9,3 10,2 11,1 13,2 14,7
0,8 2,0 3,6 5,1 6,5 7,2 7,6 7,6 7,6 7,6 7,6 7,6 7,6 7,6 7,6 7,6 7,6 7,6 7,6
8,2 21,7
41,0
63,1
87,1
106,2
118,4
130,5
140,8
150,1
159,6
169,4
178,6 186,1
196,0 201,8
208,1 208,2 214,7
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Mill
ions
Euro
Support scheme costs Tax Revenue Local Royalties NSP reduction
New auctions: Costs Vs Benefits
Prospectives 2014-2035 (Low Scenario) ‣ To the annual level benefits will be immediately higher than costs
‣ From 2021, the incentives costs will constantly decrease and NSP
reduction will constantly increase
4,7 5,9 8,8 11,9 24,1 40,1 57,3 74,4 88,0 99,1 110,8 122,8 134,1 144,2 156,9 167,3 179,3 187,4 202,5 Costs/ Benefiits
Annual net [Milion Euro
Dr. Davide Astiaso Garcia - Secretary General – Italian Wind Energy Association
New auctions: Costs Vs Benefits
Prospectives 2014-2035 (High Scenario) ‣ To the annual level benefits will be immediately higher than costs
‣ From 2021, the incentives costs will constantly decrease and NSP
reduction will constantly increase
Costs/ Benefiits
Annual net [Milion Euro
12,7 42,7 81,1
121,4
146,8 151,1
141,4 130,7 123,9 120,4 115,8 111,5 106,8 101,7 96,1 88,6
79,0 67,2 53,0
4,4 8,6 13,3 16,0 18,0 16,6 17,1 16,8 16,8 16,8 16,8 16,8 16,6 16,1 15,9 17,4 19,0 20,7 21,6
1,6 4,0 7,1 8,7 9,5 9,5 9,5 9,5 9,5 9,5 9,5 9,5 9,5 9,5 9,5 9,5 9,5 9,5 9,5
16,7 44,0 83,6
129,7
180,3
221,5
258,6
286,2
310,2 332,4
355,6
379,8
403,5 425,1
451,7 472,0
495,0 508,4
536,4
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Mili
oni d
i Euro
Support scheme costs Tax Revenue Local Royalties NSP reduction
10,0 13,9 22,9 33,0 60,9 96,4 143,7 181,8 212,6 238,3 266,1 294,5 322,7 348,9 380,9 410,3 444,4 471,4 514,4
Dr. Davide Astiaso Garcia - Secretary General – Italian Wind Energy Association
Total support
scheme cost 1071 – 1892 Millions
€
178 – 305 Millions €
124 – 238 Millions €
2590 – 5891 Millions
€ NSP reduction
Tax revenue
Local Royalties
1.820 – 4.542
Millions € Net Benefits
2014-2035
New auctions: Costs Vs Benefits
2014 – 2035 prospectives
Dr. Davide Astiaso Garcia - Secretary General – Italian Wind Energy Association
Next steps: Global Wind day 2015
Rome, June 11, 2015 – Wind power in Italy,
costs and benefits
To participate please contact:
Dr. Davide Astiaso Garcia - Secretary General – Italian Wind Energy Association
Next steps:
Key Wind 2015
Rimini November 3rd - 6th , 2015
For information please contact:
Barbara Padovan